RCM on ROC fees

[Narayan Pujar]

One of our clients has paid ROC fees towards SH-7 [Alteration of Share Capital]. Wanted to know whether GST is payable on this or any other fees paid to ROC, under RCM. If yes or no, then why?

 

[Sadanand Bulbule]

Refer Discussion ID No. 119341 dated 09/10/2024.

[KASTURI SETHI]

Pl. elaborate  your query with full facts. Your query is too brief to reply.

[Shilpi Jain]

There is a recent decision of the HC in the case of CERC where it is stated that GST is not liable on payments made to CERC being a regulator and in the nature of Tribunal [Central Electricity Regulatory Commission vs Union of India & Ors [2025 (1) TMI 887 - DELHI HIGH COURT. The findings in this case will be very helpful in defending the stand of no liability under RCM on ROC fees.

This is an issue that would be settled only from Tribunal level onwards.

[Narayan Pujar]

@Kasturi Sir, the client has paid fees to the Ministry of Corporate Affairs [MCA] while filing Form SH-7. This form is a statutory requirement for reporting any alteration in the Company's share capital. My question was will this be covered under Entry 5 of NN 13/2017-CT [R] for RCM to become applicable on the fees paid to MCA [such fees are usually termed as fees paid to Registrar of Companies (ROC)].

@Sadanand Sir and @Shilpi Ma'am, thank you for your valuable response.

[KASTURI SETHI]

Sh.Narayan Pujar Ji,

My views in Q & A form are as under:-

(i) Services supplied by the Central Govt. to a business entity are covered under RCM at serial no.5 of Notification No.13/2017-CT(R) dated 28.6.2017 as amended up to 08.10.24. (Emphasis is laid on the word, 'business').

(ii) Whether the activity or transaction is covered under the definition of 'business' as per Section 2 (17)(i) of the CGST Act ?

My view : Yes because the definition includes any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities;" Emphasis laid on the term, 'public authority'

((iii) Whether the activity mentioned by you conforms to the definition and scope of supply as per Section 7 of CGST Act, 2017 ?

My view : Yes. The activity constitutes a supply of service.

(iv) Whether any exemption is available to the services provided by Govt. in terms of Notification No.12/17-CT (R) dated 28.06.17 (as amended) ?

My view : In the absence of full facts no reply is possible.

(v) Whether the activity falls in the exclusion clause at serial no.5 of Notification No.13/17-CT (R) dated 28.6.17 as amended ?

My view :: 'No'. The Notification is very much clear.

(vi) Whether the fee paid to Central Govt. conforms to the definition of, 'consideration' as explained under Section 2 (31) of CGST Act

(vii) My view : Yes. Fee is always in lieu of service e.g. Advance Authorisation fee with DGFT, fee for registration of copyright, trademark/brand name, patent etc. with respective Govt. department, marketing fee, parking fee etc. Also go through the meaning of 'public authority.

[Yash Shah]

According to Entry 9 of Notification No. 12/2017 CTR of CGST Act, Services provided by inter alia Central/State government not exceeding Rs. 5000 shall be exempt.

Further, as per entry 47 of the said notification, Services provided by inter alia Central/State government by way of registration required under any law for the time being in force are exempt.

As per Entry 5 of Notification No. 13/2017 CTR of CGST Act, Services supplied by inter alia Central/State government to a business entity are liable to pay tax under reverse charge (RCM).

Therefore, IMHO fees paid to ROC in case when registration is required under any law or when service supplied is Rs. 5000 or below shall be exempt. However, in all other cases it falls under entry 5 of Notification no. 13/2017 CTR and hence, liable to RCM.

[KASTURI SETHI]

I fully concur with the views of Sh.Yash Shah sir.

NIL rate is restricted to Heading 9983 or 9991 only.

Here registration is not the issue.

[Narayan Pujar]

Thank you all for sharing your views—they’ve been really helpful!

AI Summary

Reverse charge on government services may apply to ROC filing fees unless registration or low value exemptions apply. Services supplied by the Central Government to a business entity are generally subject to reverse charge under Entry 5 of Notification No.13/2017, and fees paid to MCA/ROC for statutory filings constitute consideration for a supply; however, exemptions in Notification No.12/2017 - notably the low value exemption and the registration required exemption - may exclude certain ROC fees from GST liability, and recent case law on regulators has been invoked though the issue is not finally settled.